Patrick E. Murphy, Director
of the Institute for Ethical Business Worldwide,
sat down with Xilinx CEO

Wim Roelandts in the spring
of 2003 to discuss his philosophy of leadership and creating a culture
of ethical decision making.

Interview
transcript:

PEM:
What is your philosophy of management?

My
philosophy is based on my experience at Hewlett-Packard for 30 years. I am European born from Belgium
and worked in France
for HP so I would describe my
philosophy as European/International/HP - a blend of all three.
I believe that what drives people is the value of loyalty
and this was a strong value at HP until I left in 1996. My
goal here is to do an HP+; that is, to bring all the good things
from HP without the negative ones.

PEM:
How would you describe Xilinix's corporate culture?

We
have a very people-oriented culture here. We try to balance
the interests of many stakeholders - employees, shareholders and
customers, for example. And we tend to take a longer-term
view of our business rather than be too affected by the day-to-day
tosses and turns of the stock market. One of my passions
is reading books about history and I learn a lot about corporate
culture from them. This also helps me understand the historical
point of view and try to keep from making the mistakes of others.
One recent book that I've read that I would recommend is Leading on the Edge . It describes
an expedition to the South Pole and it also includes management
lessons at the end of each chapter. I have given a copy to
my staff. I am certainly not a believer in management fad
books. My experience is that corporate culture is complex
and you can't cure it with the latest theory. Among my favorite
gurus are Peter Drucker and Barry Posner. I am also a regular
reader of the Harvard Business Review .

PEM: You described that you were trying to include the best points
from the HP culture without the negative ones. What are some
of the things that you are doing differently?

HP
was very people focused and consensus driven. The down side
of that was that it took the longest time to make decisions because
more ideas were constantly solicited from everybody; everyone had
to agree. My philosophy is "democratic decision making" that
means that everyone is involved in idea generation, but then I believe
in "dictatorial execution;" when it's time to make a final decision
the management team will do it. It is important that once
decisions are made that I get feedback. A second difference
is insisting on personal accountability. When a project is
ongoing at Xilinx we come up with a date for completion and do not
let it slip. The people involved in the team are then held
personally accountable for making and meeting the deadline.
A third difference: at Xilinx we want to have an innovative
culture. Therefore, we must not punish failure. We
emphasize that failure is part of the job and we can always learn
from failure.

PEM: What is the major challenge that Xilinx is facing at the
current time?

From
the business side, the bubble has definitely burst and after this
current recession we will not return to the spend-free environment
of the dotcom craze. Customers and business people now are
much more cost cautious and worried about investing in real advances
in technology and things like inventory. I am worried about
the U.S.
and its ability to compete with the Far
East , China
, India
, and those countries.
My view is that stock options in the high tech industry are ways
that help us get the best people to work here. Options help
people feel like owners and result in innovation and creativity,
but there is a downside as well - it is painful when the stock goes
down.

PEM: What are the major principles of management that you follow?

The
first is ownership. My feeling is that stock options are
not primarily about money. Rather, everyone who gets stock options
behaves and feels more like an owner in the company. I think
it is truly a key way to reward people and make them feel connected
to the company. It is a lesson I learned from my Dad who
both owned his own small business and worked for a large enterprise
as well. I learned that if you want people to behave as employees
then you treat them one way. If you want them to behave as
owners then you treat them another way. A way to convince
people to take a salary cut, which we have done, is to have them
think of themselves as owners. People at Xilinx care about
the company and their rationale for doing their best is that they
know innovation and technology and bringing things quickly to market
will create breakthroughs and business opportunities that they will
share in. Stock options have been misused but the important
thing is how they are employed. My belief is that employees
should not work eighty-hour weeks and burn out for the company.
We do not think it is good for employees or for Xilinx. They
are expected to get their work done during regular business hours
or whenever they choose.

My
second principle is that people should be engaged in work that interests
them. Employees get personal benefits from doing interesting
work and tend to do their best when they are engaged. One
example is the administrative assistants at Xilinx. They
are extremely motivated and are encouraged to come together regularly.
A couple of years ago they were involved in a best practices
exercise. They looked at their jobs and they asked how could
they get out of doing boring work like distributing payroll slips.
The solution they came up with then was sending them by e-mail
and now they are distributing payroll slips electronically.
One project that the administrative assistants took leadership on
is setting up web pages for their area. They are creating
meaning and value by doing this and they seem to be highly motivated
by it.

Another
important aspect of having meaningful work is it tends to instill
a strong sense of community. The point I made about the cost
of failure before relates to this idea. If the cost is low
and people feel free to take risks then people are more likely to
support creative new ideas and help execute them. This results
in a supportive environment. I now do not use the word "teamwork"
that much. We have expanded the concept to a much broader
context than just workers and teams. The community aspect
is a bigger idea and has a more supportive connotation. For
example, we help out families and are interested in their private
lives to the extent that they share problems with us. We
have been involved in teaching in schools in this area and have
developed a children's center. People feel strongly about
some of these issues and they encourage one another.

A
fourth principle of management is rather simple. That is "everybody
has to improve." They need to be better tomorrow then they
are today. That is, they should continuously move forward.
One way we encourage this is with job rotation. Generally
speaking, we take an optimistic view towards how people view their
work and the emphasis on self-improvement. This leads to
the next point.

I
subscribe to the "Theory Y" philosophy of management; that people
want to do a good job, are motivated to do so and, if you give them
the right tools and support, they will do a good job. Being
managed by objectives is important and supporting each other is
also an important aspect of working together. I believe in
being very optimistic about people's motives and that is part and
parcel of the basic tenets of Theory Y.

PEM: How would you describe your role as CEO at Xilinx?

I
look at it in several ways. First, the CEO has to be a champion
and talk continuously about the things that are important to him
and the firm. He or she must also set an example and "walk
the talk." Regarding our values at Xilinx, these can be rather
abstract. So I tend to use examples. The values are
the glue that keep people together in the organization. They are
the underpinnings of good communication. I try to find specific
examples of people living the values and use those in my discussions
and communication with employees to bring the values home to each
employee.

Second,
the most important failure of CEO's takes place when a gap between
what they say and what they do takes place. I call it the
"credibility gap." As CEO, I can never promise lifetime employment
or guarantee that certain things will happen. However, I
have made a strong policy to run the company so that layoffs are
a last resort. If there is a credibility gap, it is caused
by management promising too much. This can create mistrust
on the part of the employees. What makes a CEO successful
is trust and emphasizing trust throughout the organization.
If we want to demand sacrifices from people, they must trust the
management of the company. Our business declined fifty percent
during the recent, bleak times we have just gone through and the
way we have been able to go forward is with this high level of trust
at Xilinx.

Third,
I think this concept of continuously improving management is critical. I meet with the other top managers regularly and we talk
about managing in tough times. That way, management is trained
beforehand. We discuss the fact that trust can disappear
if we lack integrity or if we are not competent. It is important
that management do its homework and provide answers to questions
that employees have of them.

PEM: What about the scandals of the last year where CEO's have
been implicated in some rather serious misdeeds at organizations
like Enron, WorldCom, etc?

I
believe we have a few bad apples or a few crooks and one thing that
has caused a problem is the amount of stock options that some CEO's
receive. We found out later that a lot of these companies
were involved in "financial engineering." The attitude in
the United States ,
unfortunately, is to follow the letter of the law and not concentrate
on thinking ethically or concentrating on ethical behavior. This
is where off balance sheet accounting and other issues can happen.
My biggest disappointment is that these people knew
what was right but they ignored what they knew and did the wrong
thing. The pressure to give in or the pressure to meet the
numbers is too strong. I am Flemish and stubborn. I would not bow to the pressure to conform to activities that are
wrong, primarily because of my background.

Another
issue or problem is the elevation of the CEO as a "heroic figure."
Too many people surrounding CEO's are telling these individuals
what a good job they are doing. They get a lot of publicity
and strokes. I instruct my public relations people that I
do not want my picture on the cover of any magazine. It is
a "slippery slope." The success of the company does not depend
on one person, certainly not the CEO as hero. It is not the
right thing to do especially when employees are the reason for the
success of a company and the company is certainly dependent on many
individuals, not just the CEO.

PEM: Thank you very much for your insights, Wim. I look
forward to our next conversation.